The 1st Half of 12th Financial Year (Unit in thousand yen) Accounts Amount Accounts Amount ASSETS LIABILITIES CURRENT ASSETS 10,943,048 CURRENT LIABILITIES 8,212,910 Cash on hand & in banks 159,101 Trade account payable 6,926,248 Trade account receivable 7,700,900 Trade account payable for affiliate 430,620 Trade account receivable from affiliate 37,929 Other account payable 280,963 Inventories -tickets and coupons 101,909 Accrued expenses 14,385 Inventories -others 281 Accrued bonus 109,226 Prepayment for trading purpose 389,471 Accrued income tax 115,032 Prepayment 57,853 Consumption tax payable 23,684 Prepaid expenses 15,512 Received in advance 182,033 Deferred tax credit (current) 78,607 Deposit received 130,715 Short-term loan for affiliate 2,315,945 Other account receivable 1,936 Other current assets 86,300 LONG-TERM LIABILITIES 287,706 Allowance for doubtful accounts 2,701 Deposit for guarantee 12,549 Accrued retirement allowance 208,918 FIXED ASSETS 790,750 Accrued retirement allowance for directors 16,110 Tangible assets 93,496 Long-term payable 50,129 Structures 48,338 Equipment and furniture 45,157 TOTAL LIABILITIES 8,500,617 NET ASSETS Intangible assets 38,290 SHAREHOLDERS' EQUITY 3,232,629 Software 37,894 Common stock 490,000 Telephone subscription rights 396 Earned surplus 2,742,629 Legal reserve 86,068 Investments and other assets 658,963 Retained earnings 2,656,560 Securities for investment 4,566 Other reserve 1,900,000 Subsidiary's stock 420,507 Carried forward earnings 756,560 Long-term deposit 120,062 Long-term prepayment 1,707 Deferred tax credit (Long-term) 112,058 VALUATION / ADJUSTMENT 551 Long-term account receivable 1,872 Unrealized holding gain on securities 551 Allowance for doubtful accounts 1,810 Balance Sheet As of September 30, 2011 TOTAL NET ASSETS 3,233,181 TOTAL ASSETS 11,733,798 TOTAL LIABILITIES AND NET ASSETS 11,733,798
The 1st Half of 12th Financial Year Profit and Loss Statement From April 1, 2011 to September 30, 2011 Accounts (Unit in thousand yen) Amount Sales 2,845,050 Cost of sales 630,895 Net revenue 2,214,155 Selling, General & Administrative Expenses 1,683,871 Operating loss 530,284 Non-operating Revenue Interest received 63 Interest on short-term loan 2,081 Dividend received 44 Miscellaneous revenue 120 2,309 Non-operating Loss Exchange loss 846 846 Ordinary profit 531,746 Extraordinary loss Gain from sales and disposal of fixed assets 21 21 Extraordinary gain Reversal of allowance for doubtful accounts 2,024 2,024 Income before tax 531,725 Income tax 109,169 Income tax deferred 107,810 216,980 Net Income 314,745
The 1st Half of 12th Financial Year Statement of Changes in Net Assets From April 1, 2011 to September 30, 2011 Shareholders' equity Valuation/adjustment (unit in thousand yen) Earned surplus Retained earnings Common stock Legal reserve Other reserve Carried forward earnings Total earned surplus Total shareholders' equity Unrealized holding gain on securities Total valuation/ adjustment Total net assets Balance as of April 1, 2011 490,000 62,239 1,900,000 703,930 2,666,170 3,156,170 392 392 3,156,563 Changes in this term Reserved provided - - - - Cash dividend paid 23,828 262,115 238,287 238,287-238,287 Net income 314,745 314,745 314,745-314,745 Others excluding shareholders' equity (net) - - 159 159 159 Total changes in this term - 23,828-52,630 76,458 76,458 159 159 76,617 Balance as of September 30, 2011 490,000 86,068 1,900,000 756,560 2,742,629 3,232,629 551 551 3,233,181
List of Individual Notes [Notes on Items Regarding Significant Accounting Policies] 1. Evaluation standard and method for Assets (1) Evaluation standard and method for securities 1) Shares of subsidiaries and affiliates Cost accounting method based on the moving average is applied. 2) Other securities Marketable securities Market price method based on the market value of the last day of with fair value the fiscal year is applied. (All variance are reported as a component of shareholders equity, while the cost of products sold is calculated using the moving average method.) (2) Evaluation standard and method for inventories Cost method of first-in, first-out method is applied. 2. Depreciation method for fixed assets (1) Tangible fixed assets The declining balance method is used. The straight-line method is applied to the buildings (except equipments and structures) acquired after April 1, 1998. (2) Intangible fixed assets The straight-line method is used. For software, the straight-line method is applied based on the expected usable period within the company (five years). 3. Standard for recording allowance reserve (1) Allowance for bad debts In order to prepare for losses from defaults of accounts receivables and other claims, the amount seen as uncollectible, from reviewing the individual probability of collection of certain debts, such as debts with the possibility of defaulting, is recorded. (2) Employee retirement benefit reserve In order to prepare for employee retirement benefits, the retirement benefit liability as of the end of the fiscal period (amount paid for voluntary termination) is recorded. (3) Reserve for retirement benefit for directors In order to prepare for payment of retirement benefits for directors, the amount to be paid at the end of the fiscal period based on internal rules is recorded. 4. Significant Fundamental Items for Preparing Other Accounting Statements (1) Accounting method for consumption tax, etc. Tax exclusive method is applied. (2) Others Amounts less than one thousand yen are rounded off in the balance sheet, income statement, and statements of changes in shareholders equity.
[Significant changes to Accounting Policy] (Statements of Changes in Net Assets) Starting this interim accounting period, the Revised Ordinance on Accounting of Companies (March 31, 2011, Ordinance of the Ministry of Justice, No. 6, 2011) has been applied based on the Accounting Standards for Statements of Changes in Net Assets (ASBJ Statement No. 6, June 30, 2010) as well as the Guidance on Accounting Standards for Statements of Changes in Net Assets (ASBJ Guidance No. 9, June 30, 2010) and the balance as of the beginning of this term is shown. [Notes on the Balance Sheet] 1. Monetary receivables and monetary payables against subsidiaries and affiliates Short-term monetary receivables 858 thousand yen Short-term monetary payables 67,911 thousand yen 2. Accumulated depreciation of tangible fixed assets 295,755 thousand yen 3. Liabilities for guarantee Liability guarantee for East Japan Railway Co. for companies introducing Business EkiNet (JR s online ticket vending system for corporations) linked to our business trip expense settlement system B+PLUS [Notes on Income Statement] Transaction amount with affiliated companies Sales Sales, General & Administrative Expenses Amount other than operating transactions 162,659 thousand yen 47,780 thousand yen 2,081 thousand yen [Notes on Statements of Changes in Shareholders Equity] On the types and total number of outstanding stocks The number of stocks outstanding is 9,800 in common stocks. [Notes on Deferred Tax Accounting] The main reasons for deferred tax assets are disallowable expense such as accrued bonuses and reserve for employee retirement benefits. [Notes on Fixed Assets Under Lease] Apart from fixed assets recorded in the balance sheet, items under lease contracts are limited to office equipment such as copiers.
[Notes on Financial Products] 1. Items regarding the status of financial products The Company has limited fund management operations to short-term assets, such as deposits, and has procured funds through the Cash Management System (CMS) comprehensively managed for the entire JTB group. The Company is working to lower the client credit risk for operating accounts receivable according to the credit exposure management rules. Furthermore, security investments are mainly in stocks, and the Company keeps track of the market value of listed shares. 2. Items regarding the current value of financial products The value as recorded on the balance sheet, the market value, and the difference between the two as of March 31, 2011, are as follows. However, financial products where it is understood that it is extremely difficult to determine the market value are not included in the following table. (in 1,000 yen) Amount recorded in balance sheet Market value Difference Cash on hand & in bank 159,101 159,101 0 Trade account receivable 7,738,829 7,738,829 0 Short-term loans receivable 2,315,945 2,315,945 0 Securities for investment 4,566 4,566 0 Long-term deposit 120,062 77,256 42,806 Long-term account receivable 1,872 Provision for bad debt 1,864 8 8 0 Trade account payable 7,356,869 7,356,869 0 Deposit received 12,549 7,536 5,013 (Note 1) Items regarding the market value calculation of financial products as well as securities and derivatives trading Cash on hand & in bank, trade account receivable, and short-term loans receivable Since these can be settled in a short period time and the market value is nearly equal to book value, the book values have been used. Securities for investment As for market value, the stock exchange price has been adopted as fair value. Trade account receivable, other account payable Since this can be settled in a short period time and the market value is nearly equal to book value, the book value has been used. Long-term deposit, deposit received The discounted present value of future cash flow has been calculated. Long-term receivable For long-term receivables, since the provision for bad debt has been calculated based on factors, such as collateral and expected collection amount through insurance, the market value is approximately the same as the value recorded on the balance sheet for the accounting date subtracted by the present provision for bad loans. Thus, this amount is used as fair value.
[Notes on Asset Retirement Obligations] Our company has a property lease contract with land or building owners for rental offices, as well as some of the business assets, and we bear the obligation to restore these properties to the original state at the end of the lease period. Therefore, we will recognize asset retirement obligations for our liabilities under the law as well as the contracts. Furthermore, instead of recording the asset retirement obligation as a liability and the corresponding retirement expense as an asset, we have adopted the method of making a reasonable estimate of the amount recognized to be finally uncollectible from the security deposit paid in relation to the lease contract and posting the liability amount that belongs to this fiscal half-year accounting period as an expense. We have adopted 30 years as the estimated period of use in forecasting the asset retirement obligation. The changes in the balance of asset retirement obligation during this fiscal year are as follows. (in 1,000 yen) Balance as of the beginning of the fiscal year (note) 30,824 Increase due to the acquisition of tangible fixed assets - Decrease from the execution of asset retirement obligation - Balance as of the end of the fiscal year 30,824 Note: This is the balance as of the beginning of the fiscal year due to the application of the Accounting Standards for Asset Retirement Obligations (Accounting Standards Board Statement No. 18, March 31, 2008) and the Guidance on Accounting Standards for Asset Retirement Obligations (Accounting Standards Board Guidance No. 21, March 31, 2008) starting this fiscal year. [Notes on Transactions with Affiliates] 1. Parent company and major corporate shareholders (in 1000 yen) Attribute Parent company Name of the company JTB Possession rate (%) of voting rights 70.0% direct to be owned Relation with a connected person Directors addition -al post etc. Two part-time officers from the parent company Item1* : Other account payable Item2* : Short-term loans to affiliates Relation in the business Offer of the JTB group managemen t service etc. Loan to/from JTB group Details of transaction Group management Fees Machine usage fee etc. Loan through CMS loan Business conditions and policies for determining business conditions The trade amount Item Term-end balance 34,140 - - 80,014 Item1* 5,173 - Item2* 2,315,945 Interest earned 2,081 - - (1) Pricing and other business conditions are set upon negotiations taking actual market price into consideration. (2) Loans and borrowings are for the cash management system, which integrates the management of funds for all JTB group companies, through which borrowing and lending between participating companies are conducted daily. Therefore, the amount is not indicated. (3) Interest rates for borrowing and lending are set reasonably taking actual market rates into
consideration. (4) The transaction amounts do not include consumption tax. The outstanding balance as of the end of the fiscal period includes consumption tax. Attribute Subsidia ries Name of the company Naigai Air Services Possession rate (%) of voting rights 100% direct to be owned Item3* : Trade Account Receivables Relation with a connected person Directors addition -al post etc. President concurrently holds the CEO one part-time executive officer and one officer from our company Relation in the business Offer of the JTB group managemen t service etc. Details of transaction Outsourcing Service Expenses The trade amount Item Term-end balance 10,265 Item3* 10,265 Business conditions and policies for determining business conditions (1) Pricing and other business conditions are set upon negotiations taking actual market price into consideration. [Notes on Per Share Information] 1. Net assets per share 329,916.44 yen 2. Net profit per share 32,116.88 yen [Notes on Retirement Benefits] The company adopts the retirement lump-sum plan and defined contribution pension plan system. [Notes on Important Subsequent Events] Not applicable.